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How To Select Best Auto Insurance Policy

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If you are not adept at choosing the most appropriate cover for your vehicle, it can be very tricky for you to buy auto insurance. If your car is less than five years old, persistent vehicle insurance sales persons will try to sell their product to you. However, since insurance policies are the exact definition of the things that are written on the fine print, you should choose the insurance policy very carefully after reading the fine print. You should always compare quotes from more than one insurance provider in order to see whose deal is the best. You can choose the best auto insurance policy if you follow a few simple tips.

1. Know the Types of Auto Insurance

Generally, the plans that general insurance providers offer can be classified under two main categories.

Third- party Liability Insurance

This plan covers injury to third parties, accidental death, and damage to property. It is also a mandatory requirement for each vehicle that pliés on public roads.

Comprehensive Plan

This usually covers both legal liability of third parties and “own damage”. It also covers damage that is caused by unforeseen perils such as fire explosion, earthquake and cyclone, and theft. Hence, it is a preferred option for most people.

How To Select Best Auto Insurance Policy

2. Know the Factors that Affect the Vehicle Insurance Premium

The risks that the insurance company underwrites largely determine the premium calculation and these risks fall under the following categories.

Vehicle Related Risks

Cubic capacity, fuel type, make and many more are a few parameters that determine the premium. Since insurance companies receive a large number of claims on commercial vehicles and sports utility vehicles, higher premium payouts are necessary for such vehicles. Generally, diesel vehicles usually have a 10-15% higher premium as compared to petrol cars. When you renew, the premium that you pay largely depends on the age of your vehicle and its depreciation.

Location Related Risks

The area of registration largely determines this. Premiums are usually high if you reside in a densely populated area, near highways or an urban area.

Driver Related Risks

Insurance firms consider the profession and age of the driver. The premium goes up if there is more than one driver.

3. Know the Ways of Reducing the Cost of Vehicle Insurance

Voluntary Deductibles

Excesses or deductibles are the amounts above which claims become payable by insurance providers. If you want to use your own money to settle petty claims that accrue for small damages, then the insurance provider can reduce the cost of premium for your vehicle insurance by 30 percent.

Discount for Any Security Feature

Few cars have enhanced security systems that are built-in like immobilizers and anti-theft alarms. The probability of theft for these cars is low. Hence, if you have such a vehicle, you can insure it for less premium.

No Claims Bonus

If you fail to claim insurance on a vehicle, you can reduce its premium payout by almost 50% every year. You receive the benefit of no claims bonus from the insurance company as record of good driving every year. If you decide to sell your vehicle, you can transfer the no-claims bonus to the new insurance policy you take for your new vehicle.

Buying auto insurance can be a little tricky. However, the aforementioned tips can make it easier for you to buy the right vehicle insurance. Hence, you should follow them diligently and pass the driving practical test so that you can guarantee yourself the right to drive your new vehicle.